Silver usually keeps its sheen even when gold prices drop. However, in the past two years, silver prices have fallen sharply compared with the yellow metal. Traders have used this as an opportunity to stock up silver. In 2014, silver imports reached a record high of 6,842 tonnes, an 18 per cent increase over the previous year, according to GFMS Thomson Reuters data. In value, however, the import bill fell, owing to the decline in silver prices. Silver imports in 2014 were worth $3.46 billion compared with $3.64 billion in the previous year.Silver prices fell 24 per cent in 2013 and another 15 per cent in 2014 in Mumbai. India’s gold import bill in the past two years was $30-35 billion, with net imports registering 750-800 tonnes.Gold trade was under stringent controls in 2013 and 2014, prompting several traders to move to silver. The commodity’s lower price, which almost halved from the all-time high price seen four years ago, has generated huge investment interest. The increasing demand for silver jewellery and articles was also a factor that led to increase in imports. “The surge of this magnitude in volume terms was attributed to higher investment demand and to risk-free returns in the cash-futures arbitrage. Silver jewellery and article fabricators re-stocked in high volumes as the price had declined sharply,” said Sudheesh Nambiath, senior analyst, GFMS Thomson Reuters, a precious metals analytical company. The silver trade, too, has changed, with imports — especially those by sea — now concentrated in Ahmedabad. Sixty per cent of imports happen via the sea route and40 per cent by air. In 2014, half the import by sea landed in Ahmedabad.

Sources say the ease of operating through the port there has attracted imported cargoes getting cleared from there. Mumbai’s demand is also met through the Ahmedabad. Other major centres that have seen higher activities in silver trading are Salem and Chennai in south India and Agra in north India. According to GFMS data, Germany has emerged a major exporter of silver to India. China, Hong Kong and Taiwan, the UK, Germany and Russia are the largest exporters of silver to India. Monal Thakkar, director of Ahmedabad-based Amrapali Group, said: “Half of the incremental demand for silver is investment-driven. Silverware and gifting of silver articles have also become trendy.”